LexGODFREY PHILLIPS INDIA LTD. AND ANR. versus STATE OF U.P. AND ORS.
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A
GODFREY PHILLIPS INDIA LTD. AND ANR.
V.
STATE OF U.P. AND ORS.
JANUARY 20, 2005
B [R.C. LAHOTI, CJ., RUMA PAL, ARUN KUMAR, G.P. MATHUR AND
C.K. THAKKER, JJ.]
-4.
Constitution of India :
c
Schedule VII list II Ently 62-Scope of-Levy of luxury tax on goods
or articles under-Held, not contemplated-"'Luxuries "-Meaning of-
Discussed-None of the impugned statutes seek to tax any activity but seek to
tax goods described as luxury goods-Hence the statutes legislatively
incompetent-U.P. Tax on Luxuries Act, 1995-A.P. Tax on Luxuries Act,1987-
D West Bengal Tax on Luxuries Act,1994.
Schedule VII List I Entries 83 & 84, List II Entries 54 & 62 and Arts.286
& 366(29-A)-Luxury goods/articles-Taxation of-Permissible modes-Held,
\...
method of taxing luxury goods has invariably been subjecting them to the
extent fiscal regimes of excise duties, sales tax, customs duties at heavier rates
E and not under List II Entry 62-No distinction made in Art.366(29-A) or
Art.286 or entries 83 and 84 of List I as to the nature of the goods which may
be subject matter of sale, excise or import, be they articles of necessity or
articles of luxury.
F
Art.265 and Schedule VII-Taxation entries-Subject of tax-Attributes
of an object/article, without mentioning the object/article, held not contemplated
as the subject matter of tax-Taxation.
~
Schedule VII list II Entries 62,54 & List I Entry 92-A and Arts.
286,366(29-A)-Power and Relative scope of List II entries 62 and 54-
G Imposition of luxury tax on transfer, supply or delivery of article/goods, de
hors constitutional limits on power of States to levy sales tax-Held, all the
constitutional restrictions on power of States to levy sales tax under
Art.286(3)(a) rlwSs.14,15 CST Act,1956 and S.3 and Sch.2 proviso Additional
.. '
Duties of Excise (Goods of Special Importance) Act, 1957 can not be bypassed,
allowing States to levy tax on supply of goods by describing them as luxury
H
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GODFREY PHILLIPS INDIA LTD. v. STATE OF U.P.
733
goods-Supply of luxury is nothing but supply of goods, since the goods A
themselves constitute luxury-Even if tobacco is an article of luxury, a tax on
its supply is within the exclusive competence of the Stales under List II Entry
54 rlw Art.366(29-A)(a), but subject to the constitutional Courts-Impugned
UP and AP Acts held ultra vires the power of States to levy sales tax-U.P.
Tax on Luxuries Act,1995-A.P. Tax on Luxuries Act,1987.
B
Schedule VII Lisi II Enlly 62 and List I Entries 83 and 84 rlw. S.3 ADE
Act, 1957-Relative scope of-Imposition of luxury tax by Stales on items
~
covered by S.3 ADE Act, 1957-Held, impermissible-West Bengal Tax on
Luxuries Act,1994 held invalid.
.,/.
Arts.265,246 and Schedule VII-Division of powers between Centre and
States-Nature of-Principles for interpretation of taxing entries in Schedule
VII-Held, mutual exclusivity is reflected in Art.246-Thus, taxing entries
must be construed with clarity and precision--A taxing entry which may lead
c
to overlapping must be eschewed-Elements of a tax-Subject of tax and
incidence of tax-Constitutional significance of such distinction-Discussed- D
Arts.265,246,248(2) & Taxation Entries in Schedule VII and Schedule VII List
I Entry 97-Power of taxation under entries in lists in Schedule VII-Discussed
Interpretation of the Constitulion-Noscitur a sociis-Application of the
principle-Caution to be exercised-Discussed
Luxuries Tax :
U.P. Tax on Luxuries Act 1995-A.P. Tax on Luxuries Act,1987-West
Bengal Tax on Luxuries Act, l 994-Constitutional validity of
Words & Phrases :
"Luxuries "-Meaning of
Entry 62 of List II of the Seventh Schedule to the Constitution relates
E
F
to the exclusive power of State Legislatures to make laws with respect to
"Taxes on luxuries, including taxes on entertainments, amusements, G
betting and gambling". Several States have enacted legislation which they
claim are referable to the right to tax luxuries under this Entry. These
I .,,..
appeals and writ petition relate to the Uttar Pradesh Tax on Luxuries Act,
1955, the Andhra Pradesh Tax on Luxuries Act, 1987 and the West Bengal
Tax on Luxuries Act, 1994. The legislative competence of these statutes H
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SUPREME COURT REPORTS [2005] 1 S.C.R.
A was challenged by the assessees before different fora - in some cases
partially successfully, and in others without success. To the extent the
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